Stellar Diamonds plc, the diamond development company has announced of entering into a conditional agreement with BDG Capital Limited (BDG) with respect to the proposed disposal of Stellar’s assets in the Republic of Guinea.
The binding term should is expected to bring US$2 million in cash for Stellar’s non-core projects in Guinea provided BDG satisfactorily completes its due diligence. The proceeds from the sale of Stellar’s assets in Guinea will be used for the development of the company’s Tongo-Tonguma kimberlite project in Sierra Leonne, the project that estimated at a post-tax net present value of US$104 million attributable to Stellar.
Development of Tongo-Tonguma Mine to Deliver Significant Diamond Production
The proposed mining project at Tongo-Tonguma has a low capex need of US$32 million and is likely to be the second largest mine in West Africa for kimberlite diamond. The estimated production level of the mine is 200,000 carats annually generating revenues more than US$45 million per annum with a minimum life of 21 years.
The proposed sale of Stellar’s assets in Guinea allows the management to engage in Tongo-Tonguma mine development in Sierra Leone. The proposed sale also allows BDG to move on with the project which has interests of Guinea and local stakeholders. The sale of Stellar’s assets in Guinea is the means to unlock the significant value that lies in the Tongo-Tonguma development for the company to advance towards sustained commercial production.
Stellar’s asset disposal in Guinea includes several plants and equipment and share in subsidiary companies. This includes Ressources Tassiliman Baoulé, Ressources Mandala Guinee, and West African Diamonds collectively termed “the Guinea Projects”.